SPH REIT has reported distribution per unit (DPU) of 0.54 cents for 4Q2020 ended August, less than half of the DPU of 1.46 cents posted in 2019.
For the 2HFY20, the REIT posted DPU of 1.04 cents, 63.5% lower than the 2.85 cents in 2HFY19.
Full-year DPU for FY20 stood at 2.72 cents, 51.4% lower than the 5.60 cents posted in FY19.
Gross revenue for 2HFY20 came in 7.4% lower y-o-y at $108.1 million, mainly due to waivers in rental fees and reliefs granted to tenants.
The total amount of rental waivers and reliefs came up to $31.8 million
The decline was slightly mitigated by the contributions from Westfield Marion in South Australia. The REIT completed its acquisition of 50% interest in the property in December 2019.
Property operating expenses rose 20.5% y-o-y to $29.6 million mainly attributable to the operations of Westfield Marion Shopping Centre.
Accordingly, net property income (NPI) fell 14.9% y-o-y to $78.4 million for the half-year period.
Income available for distribution in 2HFY20 plunged 79.4% y-o-y to $14.9 million.
Overall, the REIT registered a total loss of $137.0 million for 2HFY20 due to the fair value loss on investment properties of $177.7 million.
The Singapore investment properties recorded a fair value loss of S$126.0 million, and the Australia investment properties fair value loss was S$51.7 million. The fair value losses have no impact on the income available for distribution.
The manager of SPH REIT said that the REIT performed “credibly” for the first half ended February but the onset of Covid-19 impacted its performance for the second half.
Gross revenue for FY20 increased 5.6% y-o-y to $241.5 million. The acquisition of Westfield Marion contributed $37.5 million for three quarters and Figtree Grove, which was acquired in December 2018, contributed $15.9 million for its first full year.
Property operating expenses for FY20 rose 21.8% y-o-y to $59.5 million due to Westfield Marion Shopping Centre.
NPI for FY20 grew 1.2% y-o-y to $181.9 million.
For the full year, SPH REIT registered a total loss of $64.0 million mainly due to the fair value losses on investment properties of some $179.9 million.
See also: SPH REIT chairman Leong and wife sold all units
According to the filing posted on SGX on Oct 6, the board has decided to defer the distribution of $14.5 million (or DPU of 0.52 cents) – which is a part of the income in FY2020 – to FY2021 for “prudence in financial management”.
The step was taken due to the uncertainty amid Covid-19.
In addition, some $15.0 million of capital allowance was utilised to provide for capital expenditure and other working capital requirements, done to maximise “financial flexibility”.
“Across all SPH REIT’s assets, various proactive measures have been adopted to assist affected tenants, taking into consideration each tenant’s trade and sustainability. SPH REIT aims to lighten the burden of tenants in need by supporting them through this difficult time, while balancing the sustainability of the REIT’s businesses and maintaining its assets in readiness for recovery,” says the manager.
“Despite ongoing headwinds posed by COVID-19, SPH REIT’s assets are expected to remain resilient because of their strategic location, diverse tenant mix, dominant catchments and strong occupancies,” it adds.
See also: Analysts remain neutral on SPH as it fights off Covid-19 bug
As at Aug 31, SPH REIT’s portfolio registered an occupancy rate of 97.7%.
Cash and cash equivalents for the period stood at $82.0 million.
“COVID-19 has different impact on different tenants. It is important for SPH REIT to continue to tailor our approach to help our tenants in a more targeted manner to overcome this unprecedented situation,” says Susan Leng, CEO of the manager.
“Other than complying with the government’s various support measures relating to Covid-19, we have proactively engaged with and where necessary, extended our assistance to tenants whose businesses were more impacted by the crisis. SPH REIT remains committed to stand in solidarity with our tenants to overcome this difficult and uncertain time,” Leng adds.
Unitholders will receive their dividends on Nov 20.
Units in SPH REIT closed 0.5 cents higher or 0.6% up, at 88.5 cents on Oct 6.
